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Ahead of the curve

by | Mar 27, 2014 | Advisor Interviews

Ahead of the curve

by | Mar 27, 2014 | Advisor Interviews |

Jamie Lapin • Rockville, MD
Risk Management Group, LLC • H. Beck, Inc.

Jamie Lapin has achieved several impressive firsts in her financial career.
She was one of the first Certified Financial Planners in the country.

She was one of the first senior female executives for a major Wall Street firm, becoming a vice president of financial planning, when this was not the norm.

And she was an early pioneer in addressing the often complicated financial situations of couples in the midst of divorce, earning the designation of a Certified Divorce Financial Analyst.

Lapin is president of Risk Management Group, LLC (RMG), where she and her team provide a full range of financial services to clients, with an emphasis—as the name suggests—on risk management. Her firm focuses on the comprehensive development and implementation of financial plans, investment management, retirement planning, and navigating through divorce.

Lapin says, “We run ourselves in a family office modality, so we give a tremendous amount of service and attention to detail. We work with people who are retired young and people who are still aggressively working. It’s a pretty wide mix, so our only demand is that they have to be people who are actually capable of moving forward. We need goal-oriented clients—whether they are in the accumulation or distribution phase of their lives—in order to be able to really take care of them well.”

Lapin spends a fair amount of time on the education of clients and the behavioral psychology aspect, as she recognizes that working with clients on total financial plans and actively managed investments requires commitment, flexibility, and confidence in her firm’s capabilities.

She says, “Clients can be their own worst enemies—their guts and brains are regularly at war. Individuals do not receive real training in financial or investment matters, and most people fail miserably on their own, which is why active management by a professional makes so much sense.

“And that is why we emphasize that clients need to allow someone with deep expertise to help them make decisions in a way that they cannot manage on their own, for example, when to be heavily allocated to equity markets and when not to be. This approach seeks to deliver better results and returns for most clients over the long haul.”

“If a client can’t sleep at night, regardless of the income generated, it’s a bad plan.”

Lapin’s team also has a strong recognition of the pain that equity markets may have caused for many investors over the past six years—with some likelihood that, left to their own devices, they may be drawn by emotion to make the wrong decisions at the wrong times.

This is just one of the many reasons RMG makes a significant effort to develop comprehensive risk profiles for each client and family.

Lapin says, “Most people enjoy a gain and despise a loss. Trying to figure out how fearful they are of a loss is much more important than finding out how much they like a gain. There are some people who don’t mind taking the whole wild ride up and down if it gets them to a higher place at the end of the rainbow.

“But for people who have shorter time horizons or less interest in taking that ride, we need to know how much loss they can psychologically stand before the process becomes painful. If a client can’t sleep at night, regardless of the return, it’s a bad plan.

“We have created our own hybrid of the risk-assessment instruments available to us. What’s interesting is when we work with a couple, very often their risk tolerance is totally different. We have to understand and accept that their tolerances are different but decide where we’re going to go in terms of assessing risk. That can be challenging, but it is critical to achieving goals.”

With her extensive Wall Street background and long experience in her advisory practice, Lapin has extensive knowledge of both personal finance matters and best practices across a wide range of the most sophisticated investment products.

And she enjoys sharing her knowledge with both her clients and her peers. She has an active schedule of teaching personal finance to individuals at colleges, corporations, clubs, and organizations. Lapin has a wide network of advisors and coaches within the industry, and she places great value on knowledge-sharing within her peer relationships.

With this sophistication around risk management best practices, Lapin fully understands that “not one size fits all,” especially when it comes to active management for her clients.

So, it is no surprise that she says, “There is no one definition of active management, and active management comes in countless varieties. I use many of the active-management tools and third-party money-manager strategies that are available on a case-by-case basis, although certainly many portfolios look similar, and there are efficiencies of scale. I value active management, but not necessarily too active, and I tend to avoid strategies that make lots of trades that may incur added trading costs.

“Some active managers we use tend toward trend-following, some are more chartists in the predictive sense, some strategies can be long/short—both equities and bonds, and we do make use of hedging techniques as appropriate. The commonality of all of these active-management strategies is a constant monitoring of the current market environment and the willingness to be flexible in the face of changing market conditions.”

Another guiding principle for Lapin’s approach is diversification: cutting across both diversification of investment philosophy and diversification by asset class. She recognizes this as a cornerstone to the protection of clients’ wealth, helping them to navigate risk and reward in today’s complex financial environment.

And increasingly, more and more clients are looking to RMG for the active management of 401(k) assets, which Lapin sees as a long overdue and welcome change to the advisory practice.

She says, “I do not want to differentiate between a client’s personal liquid assets or their retirement money, except for a full understanding of the tax implications.

“One’s money is one’s money, and sound, active investment practices should be employed across all of an individual’s assets. It is heartening that more and more employers are offering, and indeed welcoming, the ability for advisors to offer guidance on a participant’s plan assets through separate management or self-management working with an advisor.”

Whether a client is still in peak earning years and growing wealth, or looking for a sensible income distribution plan in retirement, Lapin’s goal is to make the process as comprehensive as possible, while promoting ease of understanding and implementation.

Lapin says, “Most people are uncomfortable tackling money issues, so they wait … until they can’t wait any longer. We want to build strong, lifelong relationships, helping clients simplify their financial affairs, and allowing them to focus on those areas that give their lives meaning and purpose.”

Disclosure: Jamie Lapin is a Registered Representative of H. Beck, Inc.,
which is unaffiliated with Risk Management Group, LLC.
Securities offered through H. Beck, LLC. (301) 468-0100-Member FINRA/SIPC.

Photography by Mike Morgan